HELENA, Mont. \u2014 As Republican legislative leaders in Montana girded for this year\u2019s battle over whether to extend Medicaid expansion in the state, they took aim at one of the program\u2019s biggest backers: hospitals.<\/p>\n
If Montana\u2019s hospitals wanted to extend the government health insurance program that cost taxpayers about $1 billion<\/a> in 2024, and benefit from that revenue, they should give something back, such as additional community health care services and benefits, GOP leaders argued as the session began in January.<\/p>\n But instead, they found out just how formidable a political force the state\u2019s hospitals can be. The hospitals not only helped steamroll Medicaid expansion through the legislature, but they also defeated nearly all attempts to add new requirements to the program and to place new regulations on hospitals themselves.<\/p>\n Hospitals opposed and defeated bills to impose price caps<\/a> and to prominently post their charges<\/a> and killed an attempt to redirect Medicaid funds raised by a hospital tax.<\/p>\n Most Montana hospitals are nonprofit organizations that are largely exempt from state income and property taxes. Legislators requested drafts of several bills to scrutinize hospitals\u2019 \u201ccommunity benefits,\u201d the services they provide for free or at discounted costs that justify their nonprofit status, but did not introduce them during the session.<\/p>\n The only such bill introduced<\/a> has been significantly amended, at the hospitals\u2019 request.<\/p>\n The state hospital lobbyists\u2019 political pull has frustrated conservative lawmakers in leadership positions who are seeking more oversight of and transparency from the hospitals.<\/p>\n \u201cHospitals don\u2019t seem to want to come to the table to discuss anything, whether it\u2019s transparency, controlling costs, or providing more information to the public on services,\u201d said Republican state Sen. Greg Hertz, who sponsored the price-cap bill that was rejected on the Senate floor this month.<\/p>\n Hospitals say they\u2019re willing to debate ways to improve health care in Montana, and they point to Medicaid expansion as a program whose benefits flow to all corners of the state.<\/p>\n Yet when it comes to regulations they regard as onerous or criticism that they\u2019re uncooperative partners on health care policy, the hospitals aren\u2019t shy about pushing back.<\/p>\n \u201cI don\u2019t think I\u2019ve ever been approached by any of them on reforming the health care system,\u201d Montana Hospital Association president and CEO Bob Olsen said of the hospitals\u2019 critics in the legislature. \u201cI think that we\u2019ve demonstrated that we work on all kinds of health policies.\u201d<\/p>\n Republicans hold big majorities this legislative session and their conservative leaders \u2014 most of whom opposed extending Medicaid expansion \u2014 have often seen hospitals as a political foe.<\/p>\n But Montana\u2019s hospitals have always been a strong lobby in the state, with bipartisan appeal. The state\u2019s 63 hospitals employ about 30,000 people, according to the MHA, including many of the state\u2019s physicians, and have multiple lobbyists at the Capitol, both on their own and through the hospital association.<\/p>\n They also have a strong ally in state Rep. Ed Buttrey, a moderate Republican who also is on the board of directors<\/a> of Benefis Health System. Buttrey sponsored the original 2015 Montana Medicaid expansion bill<\/a> and bills to renew the program in 2019<\/a> and this year<\/a>.<\/p>\n In the past year, hospitals worked to form a coalition with businesses, health clinics, physician groups, insurers, and advocates for people with low incomes to push for extension of Medicaid expansion, which provides government health coverage to about 74,500 low-income, nondisabled Montanans.<\/p>\n Medicaid expansion had been set to expire this June, but the bill extending it breezed through the legislature, passing by comfortable margins in February, with bipartisan support. Republican Gov. Greg Gianforte signed it into law last month.<\/p>\n The MHA has a political action committee that donates to multiple lawmakers of both parties. In 2024, it paid particular attention to allies of Medicaid expansion.<\/p>\n The PAC gave $61,000 to the Montana Democratic Party and $75,000 to a political committee that supported moderate Republicans in contested GOP legislative primaries last June, according to filings with the state commissioner of political practices.<\/p>\n The majorities that passed Medicaid expansion<\/a> in February included every Democrat in the legislature and many of the moderate Republicans supported by the political committee financed partly by the MHA.<\/p>\n Democrats also have been voting almost universally against bills that would impose new regulations on hospitals.<\/p>\n Hertz\u2019s bill, which would have capped larger hospitals\u2019 prices at 300% of the Medicare rate for most procedures, failed on the Senate floor this month on a 26-24 vote<\/a>. All but one Democrat and nine Republicans voted against it.<\/p>\n State Sen. Cora Neumann<\/a>, a Democratic member of the Senate Public Health, Welfare and Safety Committee, also voted against a bill requiring nonprofit hospitals to show that their community benefits meet or exceed the value of their property tax exemptions.<\/p>\n Neumann said she supports better access to affordable care in Montana but that \u201cthe policies we have been presented with are not well thought out and raise concerns for me about government overreach.\u201d<\/p>\n State Rep. Jane Gillette<\/a>, a Republican who chaired the legislative panel overseeing health care spending in the state budget, tried last month to redirect a small portion of Medicaid expansion funds \u2014 $7 million a year \u2014 to certain hospitals. The money is part of $365 million generated annually by a tax on hospital services, and the corresponding federal match, according to Olsen, the hospital association leader.<\/p>\n Half of the $7 million would go to smaller, independent hospitals and the other half would be distributed to hospitals showing \u201cexceptional health outcomes and efficiencies,\u201d she said.<\/p>\n The House Appropriations Committee agreed March 24 to insert her proposals into the session\u2019s main budget bill.<\/p>\n But a week later \u2014 after hospitals lobbied against the change \u2014 the same committee torpedoed language in a separate bill that would have implemented the changes. The next day, on the House floor, all but one Democrat and 25 Republicans formed a two-thirds majority<\/a> to remove the funding change from the budget bill.<\/p>\n \u201cThat tells you what a stronghold the hospitals have,\u201d Gillette said. \u201cEven a slight variation to our current system is not acceptable to them.\u201d<\/p>\n Olsen said the change would have taken money from some larger hospitals and moved it elsewhere, and not necessarily to the smaller hospitals Gillette hoped to help.<\/p>\n \u201cShe approached us, but never tried to work with us,\u201d he said. \u201cIt wasn\u2019t going to reach those hospitals that she wanted to reach.\u201d<\/p>\n Senate President Matt Regier<\/a>, a Republican, made a last attempt to insert Gillette\u2019s amendment into the state budget bill on the Senate floor on April 17, but it was rejected on a 27-23 vote, with all 18 Democrats and nine Republicans voting no.<\/p>\n Hospitals are, however, working with Regier on his community-benefit reporting measure \u2014 the last-standing bill that might impose new regulations on hospitals.<\/p>\n The bill says<\/a> if the community benefits reported by nonprofit hospitals don\u2019t equal or exceed the value of their exemption from property taxes, they must pay the difference into a fund that would be distributed to small, \u201ccritical access\u201d hospitals.<\/p>\n During the bill\u2019s initial hearing April 2, Regier \u2014 a Medicaid expansion opponent and sometimes sharp critic of the hospitals \u2014 said he was open to amendments that hospitals might find acceptable.<\/p>\n The original bill cleared the Senate April 5 on a party-line, 30-18 vote, with Republicans in favor. Then, in a House committee meeting on April 17, Republicans attached amendments that had the hospitals\u2019 blessing and sent the bill to the House floor.<\/p>\n The changes delay the law\u2019s effective date until 2027 and more specifically define the community benefits that must be reported and the potential property tax liability to which hospitals must match their benefit.<\/p>\n Olsen said the MHA will support the amended bill.<\/p>\n \u201cThe truth of it is, hospitals have always far exceeded the tax exemption for community benefits, on the spending they do,\u201d he said. \u201cSome might fall short, from time to time \u2014 but over the long haul, they exceed those exemptions.\u201d<\/p>\n Regier\u2019s attempt to quantify the amount and compare it to nonprofit hospitals\u2019 tax exemption is not unreasonable, Olsen said: \u201cI\u2019m confident hospitals can do it.\u201d<\/p>\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. 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